Posts Tagged ‘Entrepreneur Corner’
Acision swoops up $100M as mobile data gains speed
Notoriously well-connected Russian-American billionaire Len Blavatnik has decided to place a sizable bet on mobile data leader , on Tuesday announcing he would lead the way in a $100 million funding infusion into the firm.
Blavatnik will partner his existing shareholdership in with Irish investor Dermot Desmond’s , and private equity fund , to underwrite the deal.
Privately held Acision currently offers a range of mobile services through its proprietary communications network, including mobile messaging, mobile internet browsing, voicemail, mobile broadband and close to a trillion text messages a year.
The company said that it will use the funding to shore up its position as a global leader in the current frenzy to capitalize on smartphone-ready mobile data. It is rumored to be going public sometime in the next two years–good timing considering its internal forecasts show that global mobile data traffic is set to increase 39 times between 2009 and 2014.
The $100 million shot in the arm will be needed. Acision recent coups in swooping up the business of companies including Pakistan’s , , , , and will leave it needing as many resources as it can muster.
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DEMO: Qualcomm Ventures doubles down on startups with its second startup competition
is kicking off its second annual competition today for the best startups in the wireless technology ecosystem. The communications giant will award $750,000 in total seed funding to the winners of the contest.
The venture capital arm of Qualcomm made the announcement at the conference today in Santa Clara, Calif. It will formally announce the winner next spring at the DEMO Spring 2011 conference. The company will open the competition to entrepreneurs in North America, Europe, China, South Korea, India, and Israel. (South Korea and Israel are new additions). Ideas for submissions can come from anywhere in the mobile ecosystem, from semiconductor chips to mobile devices.
“We started this in early 2009 in the throes of the financial crisis, when there was a real need to give seed money for the best ideas,” said Nagraj Kashyap, vice president of Qualcomm Ventures in an interview. “From the start, we wanted it to be an international competition, because the best ideas in one region are very different from the best ideas in another.”
Kashyap said that games and social apps are very hot in the mobile market in the U.S. But abroad, the startups have more variety, with activities in mobile apps, smartphones, backend infrastructure and user interfaces.
The aim is to help startups accelerate their technologies and get them to market quickly. QPrize finalists will be invited to the DEMO Spring 2011 conference where they will compete for the grand prize. The deadline for submissions is Dec. 14, and more info is available at . Qualcomm Ventures was started as a strategic investment group in 2000 with $500 million to invest. Participants from last year’s QPrize competition have either raised money or are generating revenues.
[Disclosure: VentureBeat is a partner in the DEMO events].
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Entrepreneur Corner: 5 legal pitfalls and 6 ways to grow your startup
Here’s the latest from VentureBeat’s Entrepreneur Corner.
– As you focus so much on the big picture when you’re starting a company, it’s easy to let details fall through the cracks. Attorney Curtis Smolar lists five things that could cause big problems if you ignore them.
– No matter how organized you are, chaos can sneak into your small business and turn entrepreneurial dreams into nightmares. Clate Mask, CEO of Infusionsoft and co-author of the New York Times best seller “Conquer the Chaos” offers six ways to beat it back.
– While President Obama and virtually every economist acknowledges that entrepreneurs are the economy’s driving force, no one is taking the lead to help startup owners out. Jeff Bussgang, a General Partner at Flybridge Capital Partners, notes some of the issues that need addressing – and some of the problems entrepreneurs face in the government machine.
– VCs today bemoan the lack of big wins, but the number of startups continues to grow. Independent consultant Brant Cooper puts forth his theory on how to create more of those wins – and keep more startups alive through fast, early mergers.
– Does your company live up to its hype? How do you reward employees? And how do you measure performance? Those may sound like simple questions, but Andy Friere, co-founder and CEO of Axialent, an international consulting firm, says the answers are the key to determining what your corporate culture will be.
Big Blue pampers its favorite Silicon Valley startups
Looking out for its own self-interest, IBM rolled out the red carpet for its favorite Silicon Valley startups today at its event in Palo Alto, Calif.
On Wednesday, the startups were treated to an all-day session with IBM executives and other experts who trained them how to speak in public. Then on Thursday, five startup CEOs got in front of a crowd of venture capitalists at the Quadrus Capital Center, where they gave their pitches in a contest for prizes.
It was interesting to watch this event to see how IBM gives entrepreneurs Big Blue bear hugs at a time of economic uncertainty. It was the sixth such event since November, 2009, and the winners of this event will move on to finals in Dublin, Ireland, in November. One participant joked that IBM got lots of the VCs to show up because it’s an investor in their funds. That wasn’t true, as IBM wasn’t an investor in any of the funds, but it suggests that there are always interlocking self-interests among various parties.
The five competitors were , which provides an iPhone app that allows you to report pot holes and other problems to your city maintenance staff and receive notification when the problem has been fixed; , which tracks livestock in real time through low-power ear tags;, which monitors parking spots in real time so that meter enforcers can put tickets on car windows efficiently; , which turns a standard water meter into a smart meter that can detect leaks, conserve water and reduce bills; and , a web-based service company that modernizes workflow in a doctor’s office.
IBM executives Claudia Fan Munce, Gerald Mooney, and Deborah Magid spoke at the event about how Big Blue tries to foster relationships with startups, even if it isn’t investing directly in them. They said it’s good business to create relationships with companies in their early stages so that they can start business relationships as those companies become more mature.
Mooney, head of the IBM public sector business, said startups should pay attention to specific trends if they want to get on IBM’s radar. Big Blue has systematically shifted its focus to growth markets in developing countries. It has also focused on cloud computing to expand capabilities and reduce costs. Going green is another big topic at IBM under a program known as Smarter Planet. And it is helping businesses become hip to the requirements of on-demand computing, or providing computing services in real time, instrumenting and analyzing businesses, and connecting people more efficiently. In each of these areas, IBM is looking for both partners and customers.
Magid, who is a director in the IBM venture capital group, said the entrants were all variations on the theme of a Smarter Planet, or using technology to make the world a better place. Venture capitalist Ann Winblad, managing director of Hummer Winblad, told the startups that intellectual capital trumps venture capital anytime, and that networking in groups like the IBM SmartCamp will pay off for startups in the long run. Interestingly, she said that startups shouldn’t worry so much about big, known competitors such as Microsoft and whether they will move into the startup’s realm. Those companies have transparent marketing roadmaps that they have to disclose to their customers, so their intentions are often clear. Less obvious are what other startups will do, she said. That’s also why partnerships with large companies can work for small startups.
The joint winners of IBM’s startup contest were Streetline Networks and CareCloud. Streetline is relatively well known as the company that puts “smart dust” sensors in the ground near parking meters in California cities such as San Francisco, Los Angeles, Sausalito and Culver City. Those meters detect whether a car is present and if the meter is fed. If it isn’t, parking authorities can send a meter enforcer to the spot and issue a ticket. San Francisco has 9,000 sensors. When a parking meter is full of coins, Streetline can dispatch someone to empty it.
Zia Yusuf (pictured, left), chief executive of Streetline Networks, said research shows that 30 – 35 percent of traffic is due to people driving around looking for parking. That’s why Streetline will use its data, which for now fills the coffers of city governments, to inform consumers as well. The company is working on iPhone and other mobile apps that can tell you where the open parking spots are near you. It will, for instance, give you turn-by-turn voice instructions to show you the nearest available spot. Eventually, other applications will sit on top of Streetline’s platform.
“Our goal is to make guided parking as prevalent as a traffic light,” Yusuf said.
The co-winner of the SmartCamp competition was CareCloud, headed by chief executive Albert Santalo (pictured, middle right). The company is bringing medical offices into the modern age by converting them to cloud computing, where much of the processing, applications, and storage for computing tasks take place in web-connected data centers. The company’s clients are medical practices, which have typically been isolated in their work patterns with little shared infrastructure and lots of paperwork.
CareCloud turns that into a more efficient digital business, leveraging the internet. A typical practice makes about $1 million a year and doesn’t have a lot of money to invest in technology. But the cloud can benefit not only the medical practice in terms of digitizing computer records. It can also benefit patients, who can use the web to connect to doctors, and doctors, who can use the web to refer patients to other doctors. The doctors can transfer records via online methods. It has digital charts and can send text messages to confirm appointments.
Doctors and patients can use their own devices to access CareCloud via computers or mobile phones. CareCloud uses open source technologies and has enterprise-class security. CareCloud says it can increase a practice’s revenue by 5 – 20 percent and lower its costs significantly. CareCloud’s goal is to hit $55 million in revenues in 2014. It has bookings for $2 million this year. The company is starting direct sales efforts at the beginning of the year, but it will also rely on word of mouth. The market size is $60 billion by 2015. The company was founded in January, 2009 and has $5 million in angel funding.
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3 key building blocks for your company’s culture
Building your company’s culture ultimately comes down to three things, says Andy Friere, Co-founder and CEO of Axialent, an international consulting firm. In this Entrepreneur Thought Leader Lecture given at Stanford University, Friere says those three things are behavior, symbols and processes.
It’s easy to talk a big game, but if your company is not living up to its hyperbole, that has a big impact on what employees come to believe about the firm. Just as critical is how you choose to reward workers with both money and time. And the ways you measure and compensate for performance also have a notable influence on the type of culture you will create.
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Welcome to the new startup order
(Editor’s note: Brant Cooper is an independent startup consultant specializing in customer development and marketing. He submitted this story to VentureBeat.)
The difficulty of assessing change is knowing where you are on the curve. At any moment in time, there’s a tendency to believe you have witnessed change, rather than are currently experiencing it.
It is, of course, impossible to predict what long-term changes the will bring to the startup ecosystem. One thing is clear, though: The large number of students graduating from college with plans to start new businesses is a global phenomenon that’s here to stay.
How founders and early investors will benefit from this emerging new startup order is is proving to be a source , though. Startups are fighting in increasingly crowded spaces and traditional investors bemoan the dwindling “big wins” – companies achieving revenues of greater than $100 million.
Today’s high tech startups are, for the most part, incredibly inexpensive to get off the ground. They’re also able to move quicker than ever. As embodied by the “” philosophy, agile, new businesses excel at quickly “learning” their way toward achieving Product-Market fit before they worry about raising significant capital to finance scaling.
These lean startups means are predicated on generating more output on less input; i.e., more power from a less expensive box. It is, essentially, miniturization – the Moore’s Law of startups.
Say the image to the right represents a Lean Startup. The spiral represents a vague idea of a new startup on the outside, iterating its way toward honing in on a product that successfully solves a problem for an identifiable group of users who are willing to pay.
Along the way, the startup may find it necessary to change its business in one or more ways – product functionality, market segment, business model – until it has found a profitable market “signal.”
Even with Product-Market fit, however, a Lean Startup may not have found a . In other words, it may not have found a market that represents the “big win” to investors.
Some of these companies will make it. Most will not. But even those that don’t have still found something of value - and in an era where we may now find thousands of these companies, what becomes of that value?
If it’s true that Lean Startups product more output with less input and that the definition for the “big win” hasn’t changed, then there’s only a couple of ways to get big: 1) hope you fund the right startups, or 2) smartly combine startups.
If each spiraling clock represents a lean startup, the bottom base of the to the right is made of companies that have complementary technology, but have not found a market in which to scale by themselves. By combining at that point, they’re able to grow and ultimately scale.
The key, though, is founders must learn to anticipate that combination pre-funding. If they don’t, the financing must be structured in such a way that an early merger rewards founders and investors sufficiently. (Perhaps a secondary equity market will emerge, designed explicitly for such a scenario.)
Leaving aside the messy realities of merging companies, the efficiencies gained through parallel learning processes may be worth the effort, especially if this new reality were to create a viable “exit strategy.”
A pool of these combined smaller companies would make for attractive acquisitions for larger firms, especially older ones that are faced with
Large, market-leading tech companies tend to move “up market” over time, maintaining competitive advantage through “continuous innovation” - which leaves the company vulnerable to disruptive innovation. Acquiring startups is one way for established businesses to stay competitive along both continuous and disruption innovation curves.
Perhaps this sort of ecosystem will enable the vertical integration necessary to or, in other words, move late majority companies into the technology revolution. Ultimately, more companies solving problems for more market segments – regardless of size – will move the entire technology industry further along its lifecycle adoption curve.
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5 things to know about Chinese startups — from former Google China president Kai-Fu Lee (video)
We were lucky enough this morning to sit down with Kai-Fu Lee, one of the most prominent figures in the Chinese internet universe. Known best and most recently for serving as the founding president of Google China, he also led R&D at Apple and founded the Microsoft Research division in China — the full trifecta of computing kingpins.
After departing Google last September (an event he remained understandably mum about during this meeting), he spied several gaps in China’s tech startup and venture capital culture. First and foremost, there were hardly any funds providing seed and early-stage financing to young entrepreneurs. The country lacked its own Ron Conway.
To remedy the problem, he founded , a startup incubator with a twist. Instead of just doling out a million dollars here and there to promising projects, the company recruits top engineering graduates throughout the country and enlists them to help its portfolio companies get off the ground, while simultaneously grooming them to found startups of their own in 12 to 18 months.
It’s like , only it starts with the human capital — one of China’s greatest strengths. .
Now, with 80 employees and 2,500 square-feet of office space in Beijing, Innovation Works is looking to raise what we hear is a $115 million fund in order to create five successful Chinese startups a year in the mobile Internet, cloud-computing, gaming and e-commerce sectors.
In discussing Innovation Works and its goals, Lee offered intriguing observations about how startup culture is different in China than America, and how his incubator’s entrepreneurs are being trained to take on both. Here are 5 of his insights:
1. Education gap: The education system in China is not set up to produce startups, Lee says. Students graduate with advanced technical training, but lack the holistic skills they need in marketing, sales, operations and leadership. “They come out as rockstar programmers, but they need coaching,” he says.
Education is even lagging behind government policy, which is actually strongly encouraging young people to start their own enterprises with matching funding and debt forgiveness programs. Lee urges recent grads to join the staffs of startups — through Innovation Works or otherwise — before heading out on their own. Launching a startup straight out of school almost guarantees failure, he says.
2. Parent trap: Older generations in China remain very conservative, including the parents of burgeoning entrepreneurs who are skeptical — to say the very least — of the startup lifestyle. Lee says he has had to personally convince more than a few parents (and at least one girlfriend) that joining Innovation Works would be a good move for young engineering recruits.
The company pays half what Microsoft, Google and Chinese search engine Baidu pays, and obviously requires more than a little risk. In a culture where security and prestige are major goals, it’s hard to entice the cream of the crop to go out on a limb and launch something on their own. “I got very nice letters back from two of the three parents I wrote to,” Lee says. “But they also said things like ‘My son’s success is now in your hands.’”
3. Failure is not (really) an option: In the Silicon Valley startup community, failure is almost celebrated. Many successful entrepreneurs say their failures taught them more than any experience, and some VCs like to see a few disasters under a team’s belt before financing them. Not so in China. “People don’t understand the risk and the failure,” says Lee. Having a startup fall apart is viewed as a sign to get out of the game, not try again. This limits the amount of experience startup executives bring to the table, stifling innovation.
4. It starts with people: “Y Combinator would have a very hard time making it in China,” Lee says. “It would have a hard time finding the startups and qualified people to fund. It could interview hundreds and find only two.” The American incubator model only works in China if you turn it on its head, starting first with the people before generating the concept. Right now, Innovation Works is funding two external startups and working on five projects that came from the inside team.
Lee says this ratio will probably flip as more entrepreneurs get the training they need. When he was first starting the incubator, he spoke with Bill Gross of and incorporated a lot of similar ideas, including centralized infrastructure like human resources, mentoring services and other tools, into all of the companies he is working with. It exposes entrepreneurs to these needs and skill sets before they spin out.
Now Innovation Works is a bastion of engineering talent — one of the key features that attracts startups into its portfolio, Lee says. When it first opened hiring, it immediately received 7,000 resumes. By the end of the first month, it had 40,000 to sift through. About 30 engineers were initially selected. Now the company has a database of more than 100,000 resumes, making it a great resource for startups having a tough time recruiting for aforementioned reasons.
5. China requires a different lens: While the mobile internet, gaming, e-commerce and cloud sectors are rapidly growing in both China and the U.S., they differ across borders in both clear and subtle ways that impact startups’ trajectories, Lee says. One major example: the iPhone and Android have yet to gain traction in China because they are too expensive, and complex contracts with carriers are not the standard. Nokia has the bulk of the market share, but is falling behind in its mobile internet offerings. This is something developers in China have to contend with and strive to work around.
Application stores, like Apple’s App Store, also won’t work in China, according to Lee. “The Chinese don’t pay for software.” he says. “A freemium model will be more successful.” And when it comes to which apps people want most, Chinese users prioritize games, music, photos and instant messaging over the standard search, YouTube, and browser options preferred by American users. Developers have to tailor their goals to these interests.
Lee also acknowledged that mobile and social gaming startups in China will have an incredibly hard time breaking into American platforms like Facebook — mostly due to tough competitors like . Notably, Zynga is moving toward a deal with Japan’s Softbank, , which could open up new opportunities for the company in Asia. It will be interesting to see if it has as much trouble expanding into China as its Chinese counterpart would have jumping to the States.
For more on Innovation Works, here’s VentureBeat Executive Editor Owen Thomas interviewing Lee:
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